The Intelligent Investor seems to also have a heart of gold. Warren Buffett, chairman of Berkshire Hathaway, is pledging most of his $44 billion personal fortune to the Gates Foundation. This is the single-largest philanthropic donation by an individual ever. The Oracle of Omaha is Mr. Gates’ bridge partner, and compared giving the money to asking Tiger Woods to take one’s place in a high-stakes game of golf.
He will gradually give over 85% of his wealth to five foundations – the Gates Foundation, three foundations headed by his children, and the Susan Thompson Buffett Foundation, named after his late wife. He reached the decision, in part due to the demise of his wife in 2004. Intimations of mortality oft enough have ways of reminding one that we cannot even carry tea for the tillerman, and a life well-lived is its own reward.
Mr. Buffett will also be joining Bill and Melinda Gates as trustees of the Foundation, and stipulating in his revised will that one or both of them must remain associated with the Foundation. The mechanism of the donation is through a regular grant of Berkshire Hathaway shares, which could, as he believes, generally rise in value.
To put the gift in perspective, the Gates Foundation is currently worth approximately $30 bln, already the largest foundation in the world, and has given $10 billion in grants since its inception in 1994, with 70% of the aid spent outside the United States. The annual budget of the United Nations in comparison, is $12 billion, and the Ford Foundation, founded in 1936, is worth about $11.5 billion.
The Gates’, speaking in response to Mr. Buffett’s decision, said, “The impact of Warren’s generosity will not be fully understood for decades. As we move forward with the work, we do so with a profound sense of responsibility. Working with Warren and with our partners around the world, we have a tremendous opportunity to make a positive difference in people’s lives.”
Speaking in a conversation with FORTUNE Magazine, Mr Buffett explained his preference for the Gates’, saying, “If you think about it – if your goal is to return the money to society by attacking truly major problems that don’t have a commensurate funding base – what could you find that’s better than turning to a couple of people who are young, who are ungodly bright, whose ideas have been proven, who already have shown an ability to scale it up and do it right?
You don’t get an opportunity like that ordinarily. I’m getting two people enormously successful at something, where I’ve had a chance to see what they’ve done, where I know they will keep doing it – where they’ve done it with their own money, so they’re not living in some fantasy world – and where in general I agree with their reasoning. If I’ve found the right vehicle for my goal, there’s no reason to wait.”
He stressed the recent decision by Bill Gates to step away from operational responsibilities at Microsoft was “just happenstance”.
The irony of the second-richest man giving money to the richest man in the world was not lost on him, and doubtless, not on the world. It will however, be money well-spent, and if it brings the world closer to controlling the ‘Big Three’ – malaria, tuberculosis, HIV/AIDS – good show!